Chapter VIA Deductions that you did not know about!

80TTA/80TTB: 80TTA is the deduction regarding to SB interest for the person aged below 60 years the limit on which deduction is Rs. 10,000/- or actual amount received whichever is less. 80TTB is for the person aged above 60 years, the limit of deduction is Rs. 50,000/-which also includes FD interest received from banks, cooperative societies, post office deposits and SB interest.  

80CCD:National Pension Scheme (NPS) or the Atal Pension Yojana (APY). Contributions made by the employers towards the NPS, also come under this section. NPS is a notified pension scheme from the Central Government. Section 80CCD has been further divided into two subsections to provide clarity regarding the available deductions for income tax assesses. While one subsection deals with the rules about tax deductions available to salaried and self-employed professionals, the other pertains to contributions made by the employer towards NPS. The maximum deduction is subject to total deduction in 80C. Total deduction of 80C and 80CCD not exceed Rs. 2,00,000/-

80E:An education loan helps you not only finance your foreign studies, but it can save you a lot of tax as well. If you have taken an education loan and are repaying the same, then the interest paid on that education loan is allowed as a deduction from the total income under Section 80E. However, the deduction is provided only for the interest part of the EMI. Only an individual can claim this deduction. The loan should be taken for the higher education of self, spouse, or children or for a student for whom the individual is a legal guardian. Parents can easily claim this deduction for the loan taken for the higher studies of their children. The loan should be taken from any bank / financial institution or any approved charitable institutions. Loans taken from friends or relatives don’t qualify for this deduction. The deduction allowed is the total interest part of the EMI paid during the financial year. There is no limit on the maximum amount that is allowed as deduction. However, need to obtain a certificate from your Bank. Such certificate should segregate the principal and the interest portion of the education loan paid by you during the financial year. It is available only for 8 years starting from the year in which you start repaying the loan or until the interest is fully repaid whichever is earlier. This means if the complete repayment of the loan is done in 5 years only, then tax deduction will be allowed for 5 years and not 8 years.

80GG: If you do not receive HRA from your employer and make payments towards rent for any furnished or unfurnished accommodation occupied by you for your own residence, you can claim deduction under section 80GG towards rent that you pay.

Conditions to fulfill for claiming deduction under section 80GG

1. You are self-employed or salaried
2. You have not received HRA at any time during the year for which you are claiming 80GG HRA component should not form part of your salary to claim 80GG.
3. You or your spouse or your minor child or HUF of which you are a member – do not own any residential accommodation at the place where you currently reside, perform duties of the office, or employment or carry-on business or profession.
4. In case you own any residential property at any place, for which your Income from house property is calculated under applicable sections (as a self-occupied property), no deduction under section 80GG is allowed.
5. You will be required to file Form 10BA with details of payment of rent.

Eligible Amount of Deduction Under 80GG

The lowest of these will be considered as the deduction under this section-

1. Rs.5,000 per month
2. 25% of the total Income (excluding long-term capital gains, short-term capital gains under section 111A and Income under Section 115A or 115D and deductions under 80C to 80U. Also, income is before making a deduction under section 80GG).
3. Actual rent less 10% of Income

80G: Section 80G of the Income Tax Act primarily deals with donations made towards charity, with an aim to provide tax incentives to individuals indulging in philanthropic activities. This section offers tax deductions on donations made to certain funds or charities. An amount donated by an individual to an eligible charity can be claimed as a tax deduction while filing of an income tax return. All taxpayers (individuals/companies/Hindu Undivided Families) are eligible to make donations to charity under Section 80G and claim a deduction, subject to limits set down by the government.

Deduction under Section 80G

Donations paid towards eligible trusts/charities which qualify for tax deductions are subject to certain conditions. Donations under Section 80G can be broadly classified under four categories, as mentioned below.

Donations with 100% deduction: (Without any qualifying limit): Donations made under this category enjoy 100% tax deduction and are not subject to any qualification limit being met. Donations to the National Defense Fund, Prime Minister’s National Relief Fund, The National Foundation for Communal Harmony, National/State Blood Transfusion Council, etc. qualify for such deductions.

Donations with 50% Deduction: (Without any qualifying limit): Donations made towards trusts like Prime Minister’s Drought Relief Fund, National Children’s Fund, Indira Gandhi Memorial Fund, etc. qualify for 50% tax deduction on donated amount.

1. 80EEB: A deduction for interest payments up to Rs 1,50,000 is available under Section 80EEB. An individual taxpayer may have an electric vehicle for personal use or for business use. This deduction would facilitate individuals having an electric vehicle for personal use to claim the interest paid on the vehicle loan.

Conditions for claiming the deduction

1. The loan must be taken from a financial institution or a non-banking financial company for buying an electric vehicle.
2. The loan must be sanctioned anytime during the period starting from 1 April 2019 till 31 March 2023.
3. “Electric vehicle” has been defined to mean a vehicle which is powered exclusively by an electric motor whose traction energy is supplied exclusively by traction battery installed in the vehicle and has such electric regenerative braking system, which during braking provides for the conversion of vehicle kinetic energy into electrical energy.